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ZZZ - AUD > Day 19 > Flashcards

Day 19 Flashcards

1
Q

What items should be included in the Auditors communication of the planned scope and timing of a FS audit of an issuer?

A

The auditor should communicate with those charged with governance the planned scope and timing of the audit.

  • Communicate how significant risks of material misstatement will be addressed
  • Planned approach towards internal control
  • Factors affecting materiality
  • Potential use of Internal Audit Staff

MCQ-03892

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2
Q

Define: Audit Risk

A

The risk that the auditor may unknowingly fail to modify the opinion on the FS that are materially misstated.

MCQ-04963

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3
Q

To exercise due professional care, the auditor should:

A

Due care in performing an audit requires a member to plan and supervise adequately any professional activity which includes critically reviewing the judgement of those who assisted with the audit.

MCQ-01503

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4
Q

When are Positive Confirmation used?

A

AKA: “Blank Confirmations”

  1. Large individual accounts
  2. The auditor expects errors or items in dispute
  3. Internal Control = WEAK

MCQ-04627

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5
Q

Define: Descriptive Analytics

When is it used?

A

Explains what happened or what is going to happen with data.

  • Summary Statistics
  • Data Sorting
  • Aging Data
  • Data Reduction

MCQ-14558

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6
Q

Equation: Sampling Interval

Equation: Sample Size

A

Sampling Interval = Tolerable Mistatement
l Reliability Factor

Sample Size = Recorded amount of the population
l Sampling Interval

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7
Q

Audit Procedure: Completeness Assertion for Inventory

A
  • Trace from the physical inventory quantities to the Tag Listing
  • Perform cutoff procedures for shipping and receiving - provides assurance that goods in transit (shipped or received) are appropriately included/excluded from inventory listings

MCQ-06713

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8
Q

What should be included in the auditor’s report when reporting in comparative form and PY was audited and CY is reviewed? (Downgraded Service)

A
  1. Reissue the prior period report
  2. Include OTHER-MATTER paragraph

Include a stmt that no audit procedures were performed after the PY date

MCQ-03381

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9
Q

What is included in the Other-Matter paragraph when CY = Unaduited and PY = Audited?

A
  • PY Stmts were audited
  • The date of the previous report
  • The previous opinions expressed
  • “No auditing procedures have been performed since the previous report date”

MCQ-03381

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10
Q

What might be included in the Mgmt Rep. Letter?

A

The reasonableness of significant assumptions used in making accounting estimates.

MCQ-02533

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11
Q

What should the auditor do when performing Analytical Procedures in the overall review stage of an audit and unexpected relationships have occured between accounts?

A

Additional tests of details are required

MCQ-02319

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12
Q

What should the auditor do when the Reasonably Possible outcome of a lawsuit?

A

Can Estimate Loss Amount = Disclose

Cannot Estimate Loss Amount = Disclose

MCQ-00019

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13
Q

List controls that are important to Financial Stmt Reporting.

A
  • Compliance with income tax regulations
  • Use of passwords to limit data access
  • Generation of reports to facilitate variance analysis

MCQ-03010

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14
Q

Name an Attest Engagement

A
  • Review
  • Compilation
  • Audit

Note: Preparation Engagement = Non-Attest

MCQ-04550

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15
Q

Where should the lack of evidence be disclosed in the Auditor’s Report?

A

When disclaiming an opinion, the lack of evidence should be disclosed in the Basis for Disclaimer of Opinion section

MCQ-14983

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16
Q

Who initiates the conversation with the predecessor auditor?

A

The Successor Auditor

Note: The Successor Auditor needs to get permission from the client first

MCQ-02747

17
Q

What must the auditor do when asked to issue a report on a client’s compliance with contractual agreements in connection with a FS Audit?

A

The auditor must have audited the client’s FS (Unmodified or Qualified Opinion) and may only issue negative assurance on compliance

MCQ-14504

18
Q

What is the CPA’s responsibility when they decided to rely on the audit work performed by another firm?

A

Review the other firm’s audit WPS and reperform a subset of audit testing to validate the other firm’s conclusions

MCQ-08414

19
Q

What should be included in the auditor’s report when reporting in comparative form and PY was unaudited and CY is audited? (Upgraded Service)

A

Other matter paragraph

Include a stmt that the service was less in scope than an audit and did not provide basis for an opinion

MCQ-03881

ZZZ - AUD (24 decks)

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